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Association in trouble

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1 Association in trouble on Wed Apr 06, 2011 8:25 pm


Arresto Menor
MPHAI (Menlo Park Homeowners Association)

Summary of Events
Incorporated in 2003 by BF Citiland (BF),the estate developer and broker. Location: BF Homes,Parañaque. Entrance : from Elizalde street via Concha Cruz Homeowners Association. Propery size: 24,894 m2 ( is exclusive roads,bridge and general greenery). Recreating facilities: One Clubhouse,one swimming pool,one play ground (Total: 1,385 m2). Potable Water Facility: One +/- 150 m3 storage tank,ground water well ,including pumps +pipes, distribution pumps and piping systems to the lots.(Area: 205 m2) Area available for residential construction: 23,304m2 . Land price:12.000 peso/m2. 50% up from neighboring subdivisions for its upscale lay out and facilities.
Statistics as per September 31,2011 . Permanent residents: 26 (Max. possible permanent residents : 71) Occasional residents: 4 None occupied houses: 10
Association fee: 50 pesos/m2
Theoretical Association receivables:50 x 23,304 = peso 1,165.150. Delinquent Homeowners: +/- 25% (of theoretical receivables). Total payment of BF Citiland for unsold properties and model houses: +/- 25 %.

The subdivision was advertised as an upscale living area with more than standard facilities. The members of the association board were all employees from the developer’s staff. This situation remained until 2009. The BF Citiland association board was not very active during this period, there was hardly any info and meetings.

The residents received an association notice in August 2008,that the association fee (set at pesos 35/m2 in 2003) should be increased to pesos 50/m2 as per October, 2008. The cost for 2007 were given as 1.05 million and the estimate for 2008 was a total of pesos 1.18 million.(12% increase). The increase was acceptable, when all facts were taken into consideration from 2003-2008. There was no swimming pool in 2003,minimum wages had increased, VAT went up from 10-12 % and the electricity rates kept on rising. A few months later, the residents received a second notification for association fee increase. Cost for 2008 were not 1.18 million,but 1.67 million.(A 60 % increase). The association fee would have to be increased to 70 pesos/m2. The BF Citiland board association had greatly mismanaged the Menlo park in 2008 and had created a debt over pesos 800,000.
The residents did not accepted, disapproved their management in a meeting held in January 2009. A resident-auditor was appointed, the residents were allowed to be elected into the board and the association fees would not be paid until the auditing would be completed. After election of the new board in April 2009, there were 3 representatives of the residents and 2 representatives of BF Citiland.
After the completion of the initial auditing, the new board decided, that the increase of 35/50 pesos should be implemented as from the beginning of 2009,but the second increase from 35-70 should be obtained by cost cutting. The BF Citiland Board members and its management were not really willing to cooperate in respect of the cost cutting. This is an odd behavior.
Although the Menlo Park operations were slowly turned over to the residents, BF Citiland kept the treasury function. The BF Citiboard members stated at the end of 2009,that the residents should take full administrative and financial control. This was refused. BF Citiland should first clear up the association financials in respect of receivables as well as cost. The next official request for full take over was received by the Resident board president in the beginning of October, 2010. The BF Citiland president requested in writing, that the residents would take over full control over association. Resident board members had several meetings on the subject and have responded to BF president. The main subjects in those letters were: what to do with high percentage of delinquent payments, proposals for cost cutting and the status of the developer, which should become a major homeowner instead of an entity with special privileges These letters were never answered.
The account of the association was not accessible anymore after the closure of Banco Filipino. Several checks for service contractors and utilities were approved and signed in the beginning of March, but could not be cashed in from March 11 onwards. BF Citiland refused to replace the checks for the contractors and only paid the Meralco bill for the street lights in cash.
A general association membership meeting ,including elections for a new board were conducted in the Menlo Park Clubhouse on April 2,2011. BF representative and board member attorney Navarro gave the following statement in respect of financial situation of association; 1)BF Citiland claimed a total of pesos 1.627.340 as the association debt to BF Citiland.(Advance payments to the association). 2)The total outstanding delinquent payments, including penalties amounted to pesos 1.001,672.54. 3)The difference between the amounts pesos 625,667.60 was the debt amount payable by the association to BF Citiland.
The association were given 2 options : Option 1 a)To take over the financial management and the debt would be waived. b)The association will start with zero debt c)BF Citiland would advance their association fee of 5 months, to provide the association with working capital.
Option 2. a)Not to take over the financial management and the association would be indebted with an amount of pesos 625,667.60 .
For both options : a)BF Citiland will manage and maintain the swimming pool and clubhouse. b)BF Citiland will maintain the roads, bridge and creek embankment of the Menlo Park.
The above was confirmed in writing by the association to BF Citiland with the request, that the newly elected board would be granted ample time to review the proposal.
BF Citiland has not given any reply. Our auditor has found that BF Citiland has not paid among others the security contractor since January this year (Total new outstanding debt: +/- peso 300,000) and has a habit of offsetting debits/credits in their book keeping. We should at least given the chance to audit the debt claim and get some transition period granted.
At this very moment, BF Citiland does not want to receive anymore payments for the association and does not make anymore payments on behalf of it.
We try to cope, opening up a new bank account for the association and set up the bookkeeping and billing system.
In addition of all this direct financial matters, there are a few other matters ,which came to the surface in the board meetings of 2009 and 2010.
a)BF Citiland has traded the exclusive rights of the residents of Menlo park (Water,Clubhouse,Swimming pool,Playgrounds ) with Concha Cruz Subdivision for the right of way (MOA),without informing the residents ,that their exclusive rights were not so exclusive.
b)The gates of the Menlo Park are not the parks property and the guard house is an illegal building located outside of the gates.
c)The water system is maintained and operated by BF waterworks,with BF Citiland as the beneficiary. All the surrounding subdivisions have Maynilad supplied water at this moment. Our residents were interested as well in Maynilad water supply. Hence we have asked BF Citiland to submit the contract ,between them and BF water works and the permit to operate the well. No answer received until date.
d) The electrical system for ground lights installed by BF Citiland is unsafe and the billing for it were very high. We have requested modifications, but no answer until date.
It seems, that BF Citiland management just can do anything as they see fit. Creating debts and have others pay for it, promising exclusivity and selling it off , do not have to meet any legal construction standards and can create illegal buildings.
The association board is responsible to act in the best interest of its members,hence should not create debts etc.


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